India’s imports of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) from the United States fell 43% month over month in September 2026, as supplies from West Asia recovered. According to ship-tracking data accessed by Business Standard, combined US shipments declined to 1.22 million tonnes from 2.13 million tonnes in August. Meanwhile, imports from West Asia increased 67% to 13.56 million tonnes, reflecting the recovery of regional energy flows despite continuing geopolitical risks.
The shift highlights how shipping costs, crude quality, supply availability and refinery economics influence India’s energy purchasing decisions. Although the United States has encouraged India to buy more American energy, Indian refiners have increasingly turned to West Asian and other suppliers when those options are more commercially attractive. The changing import mix also underscores the importance of India’s energy diversification strategy as global oil and gas markets remain sensitive to conflict and disruptions along major shipping routes.
Key Takeaways
- India’s combined imports of US crude oil, LNG and LPG fell 43% in September to 1.22 million tonnes.
- US supplies declined from 2.13 million tonnes in August and were more than 50% below the two-year high recorded in October 2025.
- India’s imports of oil and gas from West Asia increased 67% month over month to 13.56 million tonnes.
- High tanker costs, longer voyages and limited supplies of refinery-compatible US crude have weakened the economics of American shipments.
- Transportation and insurance reportedly account for 20–25% of the value of a crude consignment, compared with less than 5% before the conflict.
- India’s energy purchases are increasingly shaped by price, logistics and supply reliability rather than political preferences alone.
- The shift could influence India-US energy trade discussions and the country’s overall energy import bill.
US Oil and Gas Imports Decline Sharply
The September decline followed a period in which India increased purchases of American fossil fuels as disruptions in West Asia forced refiners to seek alternative supplies.
US crude oil, LNG and LPG imports had reached 2.58 million tonnes in May 2026, according to Kpler data cited by Business Standard. That was the second-highest monthly level in five years, behind the 2.86 million tonnes recorded in October 2025.
By September, combined shipments had fallen to 1.22 million tonnes, the lowest level since April, according to the report.
India’s US energy imports
| Period | Combined US crude, LNG and LPG imports |
|---|---|
| October 2025 | 2.86 million tonnes |
| May 2026 | 2.58 million tonnes |
| August 2026 | 2.13 million tonnes |
| September 2026 | 1.22 million tonnes |
Source: Business Standard, citing Kpler and ship-tracking data. Figures cover crude oil, LNG and LPG combined.
The September figure represented a month-on-month decline of approximately 43%. It was also about 57% below the October 2025 peak.
The figures cover several different energy products, so they should not be interpreted as a 43% decline in US crude imports alone. Crude oil, LNG and LPG have different transportation requirements, pricing structures and uses within India’s energy system.
The broader direction, however, is clear: American shipments have lost ground as competing supplies have become more accessible and the cost of long-distance transportation has increased.
West Asian Energy Supplies Make a Comeback
While US supplies declined, India’s imports from West Asia rebounded sharply in September.
Business Standard reported that combined oil and gas imports from the region rose 67% month over month to 13.56 million tonnes. The recovery followed severe disruption to regional energy flows during the conflict involving Iran, Israel and the United States.
Separate estimates published by The Financial Express showed West Asian crude imports increasing to 2.10 million barrels per day in September, up from 1.21 million barrels per day in August. The region accounted for 39.5% of India’s total crude imports during the month, compared with 26% in August.
The recovery was supported by shipments from major Gulf producers, including Iraq, Saudi Arabia and the United Arab Emirates. Kuwait and Oman also contributed to regional supplies.
Why West Asian supplies became more competitive
Several factors helped Gulf producers regain market share:
- Shorter transportation routes: Gulf shipments generally require less travel time to reach Indian refineries than cargoes from the US Gulf Coast.
- Improved supply availability: Regional producers and traders found ways to move more oil despite continuing risks around the Strait of Hormuz.
- Alternative export routes: Pipelines, bypass ports and ship-to-ship transfers helped some producers move cargoes while maritime conditions remained difficult.
- Suitable crude grades: West Asian suppliers offer crude grades that can fit the processing requirements of many Indian refineries.
The recovery does not mean geopolitical risks have disappeared. Business Standard reported that only around 60% of Gulf oil exports crossed the Strait of Hormuz in September, compared with 83% before the conflict. The region’s ability to restore exports therefore remained dependent on alternative logistics and continued access to shipping routes.
High Freight Costs Make US Oil Less Attractive
Transportation expenses have become one of the biggest factors affecting the economics of American crude shipments to Asia.
Very large crude carriers (VLCCs), which can transport around two million barrels of oil, have become substantially more expensive to charter. Business Standard reported that daily charter rates had climbed to nearly $1.5 million, compared with approximately $50,000–$75,000 in early 2026.
Such costs can materially change the delivered price of crude oil.
For a refiner, the purchase decision is not based only on the quoted price of a barrel. The total cost includes the crude itself, freight, insurance, port expenses and any additional costs arising from delays or route changes.
The impact of freight and insurance
| Cost factor | Reported position |
|---|---|
| VLCC charter rates | Nearly $1.5 million per day |
| Earlier charter rates | Around $50,000–$75,000 per day |
| Transportation and insurance share of crude cargo value | 20–25% |
| Comparable share before the conflict | Less than 5% |
| Typical US-to-India voyage cited in the report | More than 45 days |
Source: Business Standard, citing shipbrokers and refining officials. Figures are reported estimates and can vary by route and contract.
The longer journey from the United States also ties up vessels and cargoes for extended periods. Business Standard reported that some vessels were taking routes around the Horn of Africa to avoid security risks around the Suez Canal route.
Higher freight expenses can erase the advantage of buying a particular grade of crude at a competitive price. This helps explain why Indian refiners have shifted towards alternative suppliers when Gulf shipments became more accessible.
The trend is consistent with wider reports that record tanker rates have reduced the attractiveness of US crude for Asian buyers. <Cite refs={[“turn443071news28”]}/>
Crude Quality Also Influences Refinery Decisions
Not every type of crude oil is equally suitable for every refinery.
Indian refineries process different crude grades depending on their equipment, product requirements and operating economics. Some complex refineries are designed to handle medium and heavier sour crude, which contains more sulphur than lighter sweet grades.
Business Standard reported that limited supplies of medium sour crude from the United States have made American oil less attractive to some Indian refiners. US light sweet crude can still be useful, but it may not provide the best economics for every facility.
The choice also depends on the products a refinery expects to produce and the relative prices of petrol, diesel, aviation fuel and other refined products.
West Asian suppliers can offer grades suited to many Indian refineries and benefit from shorter shipping distances. When Gulf supplies recover, refiners can compare those cargoes against American alternatives on a delivered-cost basis.
This is why crude imports can change substantially even without a formal government decision to favour one supplier over another.
India’s Energy Purchases Remain Driven by Economics
The shift in imports comes as the United States has encouraged India to increase purchases of American oil and gas as part of broader trade discussions.
However, Business Standard reported that senior officials at state-run refiners said the government had not instructed them to purchase energy from any particular country. Refiners said commercial considerations remained central to sourcing decisions.
That distinction is important. India is a major energy importer, and changes in crude prices, shipping costs or supply availability can affect refinery margins and the country’s import bill.
A buyer may choose American cargoes when their delivered price is competitive, but switch to Gulf, Russian or other supplies when the economics change. The sourcing mix can also differ by product: crude oil, LNG and LPG are not interchangeable, and each has its own supplier network and infrastructure requirements.
India’s energy security strategy therefore involves diversification rather than a simple choice between the United States and West Asia. Maintaining access to several suppliers can help refiners respond to changes in price and availability, although diversification cannot eliminate exposure to global market shocks.
What the Shift Means for India-US Energy Trade
Energy purchases have become a relevant issue in India-US trade discussions. Washington has sought greater American energy exports to major economies, including India, as part of its wider trade agenda.
The decline in shipments does not by itself indicate a breakdown in bilateral energy cooperation. It shows that actual trade volumes can diverge from political objectives when freight costs, product specifications and alternative supplies change.
Business Standard reported that efforts by Indian state-run companies to conclude larger US crude or LNG import deals had made limited progress, with some purchases remaining opportunistic.
Long-term supply contracts could offer greater volume visibility, but they also require buyers and sellers to agree on pricing, delivery schedules, contract flexibility and other commercial terms. If shipping remains expensive, a long-term arrangement may need to account for freight and route risks to remain competitive.
The broader trade relationship will also depend on progress in negotiations over tariffs and other outstanding issues. Energy imports are one component of that relationship, not the sole determinant of its direction.
Risks for India’s Import Bill and Energy Security
A shift towards West Asian crude may improve transport economics when regional supplies are available, but it also creates risks if shipping routes are disrupted again.
India relies heavily on imported crude oil and has significant exposure to international prices. A supply interruption or a sustained increase in freight and insurance costs can raise the landed cost of energy even when the volume of imports remains stable.
Higher crude costs can pressure refinery margins, increase the cost of petroleum product imports and exports, and contribute to inflationary pressures across the economy. Natural gas and LPG markets have their own supply and pricing dynamics, which can affect electricity generation, industry, fertiliser production and household fuel availability.
The effect on consumers is not automatic or immediate. Retail fuel prices, government policy, taxes, refinery economics and the timing of supply contracts all influence how changes in international markets reach domestic prices.
India’s ability to maintain access to multiple suppliers, secure shipping capacity and manage inventories will therefore remain important as the global energy market adjusts to geopolitical disruptions.
The Bigger Picture
The 43% fall in US energy supplies to India illustrates how quickly global trade patterns can change when freight costs, supply availability and regional security conditions shift. American oil and gas helped diversify India’s purchases during a period of disruption, but the recovery in West Asian shipments has made regional suppliers more competitive again.
For India, the key issue is not simply which country sells the most energy. It is whether refiners and importers can secure reliable supplies at competitive delivered prices. Maintaining multiple sourcing options can help manage risk, but the country’s dependence on imported fossil fuels leaves it exposed to international prices and shipping disruptions.
Looking Ahead
October’s import figures will help determine whether the September decline in US shipments was temporary or part of a more sustained change in sourcing patterns. Business Standard reported that October US energy imports were approaching six million tonnes at the time of publication, with projections suggesting they could exceed September’s purchases. Those figures were preliminary, so final data will be important before drawing conclusions about the next phase of trade.
In the longer term, India’s energy sourcing will continue to reflect the balance between price, crude quality, freight, supply reliability and geopolitical risk. Progress in India-US trade talks could influence future energy contracts, but commercial terms will remain crucial. The recovery in West Asian imports shows that diversified sourcing is most useful when buyers can compare alternatives and adapt as market conditions change.
Frequently Asked Questions
1. Why did US oil and gas supplies to India fall 43% in September 2026?
Combined imports of US crude oil, LNG and LPG fell to 1.22 million tonnes from 2.13 million tonnes in August. High freight costs, long voyages, limited availability of suitable crude grades and a rebound in West Asian supplies contributed to the shift.
2. Which region increased energy supplies to India?
West Asia’s combined oil and gas shipments to India rose 67% month over month to 13.56 million tonnes in September, according to ship-tracking data cited by Business Standard.
3. Why is US crude oil expensive to transport to India?
US cargoes generally travel much longer distances to India than shipments from Gulf producers. Higher tanker charter rates, insurance costs and route diversions have increased the delivered cost of American crude.
4. Does the decline mean India has stopped buying US energy?
No. India continued to import American crude, LNG and LPG. The September figures show a decline in volumes, not a complete halt in trade.
5. Why does crude quality matter to Indian refineries?
Refineries are configured to process certain types of crude. A grade that is commercially attractive for one refinery may be less suitable for another, depending on equipment, operating costs and the products being produced.
6. Could the shift affect petrol and diesel prices in India?
It could affect import costs and refinery economics, but retail prices do not respond automatically to changes in individual shipment volumes. International crude prices, taxes, refinery margins and government policy also influence domestic fuel prices.
7. What does this mean for India-US trade relations?
The decline shows that energy purchases depend heavily on commercial conditions even when governments encourage greater trade. Future volumes will depend on pricing, freight, supply reliability and any agreements concluded by buyers and sellers.
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